­

Question: I just bought my first house on Friday and I'm waiting to move in on the 31st of March. Meantime, I just got laid off and might have to move to another state for a job. I have a two-year prepayment penalty on the loan. How long should I wait before I sell my house?

Answer: If at all possible you should not sell for a long, long time.

There are two problems here:

First, the loan has a pre-payment penalty. The penalty could amount to thousands of dollars. You need to ask if the penalty applies in a sale situation or only if the property is refinanced. If it applies in a sale situation, how much is the penalty? Would the lender waive it in the event of a hardship? If yes, get such an answer in writing.

Second, you have bought a property at it's current market value. In addition, you had costs to close. If you sell, you will have marketing and closing expenses. The result is that you would have to sell at a premium above the purchase price to avoid a loss.

For these reasons your best choice if possible is not to sell. Instead you're likely to be best served by getting a new job locally or renting the property. However, to avoid risk, lenders do not want you to buy as a "residential" purchaser and then immediately lease the property. If you rent to a lender in such circumstances, they may have solid grounds to call the loan. Thus if you elect to rent you want to demonstrate that it was your absolute intent to reside on the property; that the job change was beyond your control; and that the change could not reasonably be expected.

Question: There are four people in our family and we are new emigrants to the U.S.A. Now we rent but we're wondering if it's a good time to buy a condo or townhouse?

Answer: Real estate ownership has traditionally been an important element in the creation of household wealth. According to the Federal Reserve, real estate is the largest single asset held by the public.

The general argument is that yes, it makes sense to buy a home. But you're not buying in the general case, you are considering the purchase of real estate within your particular circumstances. Thus your first step should be to speak with local brokers and lenders to learn more about nearby real estate trends and to see what financing might be available to you.

If you are not yet citizens be aware that you can still qualify for financing. You can generally get a mortgage if you have a Registration Receipt Card 1-151 (a green card) or similar documentation. Lenders can explain specific requirements.

Question: We sold a house in August 2004. And now, in March 2005, we're being asked to pay for repairs. The buyers had an inspector check the house when they agreed to purchase it. Now they are having problems with remodeling and want us to fix whatever a new inspection report finds. Do we have to pay?

Answer: Did you disclose all material problems known to you at the time of the sale? If yes, when does your responsibility end? The purchasers had a home inspection at the time of purchase. It was satisfactory to them otherwise they would not have bought, they would have required repairs or they would at least have known about given problems.

The time for the buyers to make demands was when they negotiated the purchase. Today they are no longer buyers, they are owners and responsible for the property.

Question: How many times can you take the capital gains exclusion when you sell a home? Every time you sell your home after occupying it for two years or just once?

Answer: Here's happy news: You can write off real estate profits from multiple residential sales. For example, you can sell now and shelter $100,000 in profits and sell again in two years. Here's what the IRS says:

"To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The ownership and use periods need not be concurrent. The two years may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use, but longer breaks, such as a one-year sabbatical, do not. The taxpayer also must not have excluded gain on another home sold during the two years before the current sale."

For details see IRS Publication 523 and speak with a tax professional.

Question: I no longer want to sell my home even though I signed a purchase offer. Now the buyer has retained an attorney and is claiming he suffered a loss because he took out an investment prior to maturity to have funds available for the home purchase. He also wants to force me to sell the house to him and claims he is now homeless. What is the best strategy to resolve this matter other than selling the property to the buyer?

Answer: You have no option. You must contact an attorney.

If you signed an agreement to sell then the buyer has a reasonable expectation that you will go through with the agreement. However, many agreements are "conditional," meaning that certain steps must be completed before the contract is finalized. Thus your attorney will review the agreement to determine both your obligations and possible damages.

Damages typically come in the form of money claims, however in some cases buyers seek "specific performance," meaning if a court agrees the owner must go through with the terms of the original agreement and sell the property.

Question: We want to a build a house with a mother-in-law suite. Can we proceed without the other family members getting upset?

Answer: The real estate part of the question is that you can build a new home with a mother-in-law suite if allowed under local zoning and construction rules. It could be anything from a first-floor bedroom with a private bath to a full-blown accessory apartment. As to family members and their feelings, these invariably are unique situations with potent chemistries that folks need to work out. Why would there be an objection to the construction of a mother-in-law suite? What can you do to make other family members happy?

Question: We're thinking of moving our (very new) mobile home but are having difficulty finding someone who could give us a quote. Is it better to sell the home where it is now located or to pay the cost of moving?

Answer: Perhaps the best answer is neither. Would it make any sense to rent the home where it is now located? The reason to consider a rental is that you would gain monthly income and not lose money for moving.

Search the Internet for "mobile home transport" to find a carrier and quote.

Question: What's the best way to transfer a property to a sibling and reduce both taxes and paperwork? Can my sister just add my name to her title and loan?

Answer: No. Adding someone to the title is the equivalent of "selling" the property. Once the title changes, the lender will then have the right to call the loan. As well, placing your name on the title may set off claims for state transfer taxes, federal gift taxes, capital gains taxes, etc.

Do this the cheap and easy way: Spend a money up front. Get a real estate attorney to help with a new title. See if the lender would be willing to allow assumption of the loan if additional names are added to the title. If not, you'll need new financing.

Log in to comment
­